WERAB UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF MANAGEMENT,

SCHOOL OF POST GRADUATE STUDIES

MASTERS OF BUSINESS ADMINISTRATION (MBA)

INDIVIDUAL ASSIGNMENT ON ARTICLE REVIEW

FOR THE COURSE HUMAN RESOURCE MANAGEMENT (MBA-651)

SUBMITTED TO: SEYD MOHAMMED (COURSE INSTRUCTOR)

BY Hamza Dedgeba

January, 2023

WORABE, ETHIOPIA
 Human Resource Management Best [Vital] Practices and Firm Performance:
erformance: A
Universalistic Perspective Approach
A by Loo-See Beh and Leap Han, Loo
Loo,

Article in Serbian Journal of Management November 2013,

2013 DOI: 10.5937/sjm8
10.5937/sjm8-457,
Publication at: https://www.researchgate.net/publication/276229744:
https://www.researchgate.net/publication/276229744 uploaded by Leap Han, Loo
on 23 August 2016.

SUMMARY

The universalistic perspective of human resource management approach perceives that a set of
(HRM) best practices can help to achieve competitive advantage and firm overall performance.
The set of practices conceptualized in this article are strategic human resource management
(SHRM, aligned to the strategic plan of the firms),
firm recruitment & selection, training &
development, compensation & benefit, performance
p appraisal, internal communication
communication, career
development planning and job design. As the
he perceived level of productivity and customer
service deterioration of the insurance industry in
i Malaysia initiated this universalistic study
study. The
interconnected and productive conceptual construct of independent variables - HRM vital
practices and the dependent variable - Firm performances framed in Figure 1 below
below. The study
found that some synergic or otherwise strengthening of the HRM practices can cause
proportional enhancement on firm performance(s).
performance

Figure 1 Conceptual framework

Being best the HRM practices found to enhance firm performance and competitive advantages
for firms sustenance in the local and global insurance and maybe in other business operations.
The firm performance outputss are reflected by improvement of the rate of productivity,
enrichment of the quality of service product, expansion of the extent of customer service
delivery, improvement of sales growth, and the generation of outcomes like innovative insurance
service delivery as well as obtaining of spatial and temporal competitive advantages. Then, the
study uncovers the relationship between those decisive human resource management practices
and their repercussion on the insurance firm performances of the Malaysiann district
district. The result of
the study showed inter-correlation
correlation (complementation and reinforcement) between measures of
independent HRM best practices and the dependent variable. The Pearson’s product
product-moment
correlation coefficient (r) values of the study strengthened this fact. The r value
values vary from -1 to
1 where r = -1 indicates perfect negative correlation, r = 0 indicates no correlation, r =1 indicates
perfect positive correlation. The -1≤r<0 and 0<r≤ 1 indicate various value of negative and
positive correlation coefficients. The correlation coefficient r ≥0.5 and ≤--0.5 is strong. A
0.3≤r< 0.5 and -0.5<r≤ −0.3 is moderate.
moderate A 0.3≤r< 0 and −0.3<r<0 is week (Shaun Turney,
2022). Thus, in this study most of the correlation coefficients between variables are within the
moderate level of correlation being significant at α=0.01.. The reality is stated in Table 1 below.

For example:
Strategic HRM alignment and internal communication (r = 0.209, α = 0.01)
0.01); recruitment &
selection, and training & development (r = 0.338, α = 0.01), training
raining & development
development, and
compensation & benefits (r = 0.382, α = 0.01) and Compensation
ompensation & benefits and performance
appraisal (r = 0.220, α = 0.01); Internal
nternal communication and career planning (r = 0.408, α = 0.01),

The findings also show that a relatively strong and positive correlation between performance
appraisal practices and firm performance (r = 0.342, α = 0.01) and followed by internal
communication practices (r = 0.285, α = 0.01), career planning (r = 0.247 at α = 0.01). This
implies that performance appraisal has greatest impact on insurance performance compared with
the rest of HRM best practices. Insurance firms viewed that performance appraisal management
is a vehicle for the continuous improvement of business via a coordinated program of people
management interventions (Walters, 1995 cited in Loo-See Beh & Leap Han, Loo, 2013).
However, the insurances performance had negative correlation with job design practices. The
multiple regression model with all eight predictors produced R²=0.254, F (8 303) = 12.93,
p<.000. R² value of 0.254 indicates that 25.4% of the variance in firm performance is accounted
by Strategic HRM alignment, recruitment & selection, training & development, compensation &
benefits, performance appraisal, internal communication, career planning, and job design and its
square. R-value of 0.504 indicating a strong relationship between the independent variables
(HRM best practices) and dependent variable (firm performance). Findings show that the best
predictions of an insurance performance are performance appraisal (β =.376), internal
communication (β =.201), Strategic HRM alignment in the organization (β =.183), and career
planning (β =.149). These variables explain up to 25.4% of firm performance with performance
appraisal taking the lead.

1. INTRODUCTION

The universalistic perspective of human resource management practices perceives that a set of
practices can achieve competitive advantage and firm performance. The deep roots of this
perspective is the result of seminal book ‘New Perspective on Human Resource Management,’
edited by John Storey (1989, Cited in Bratton and Gold, 2003, rehearse in Z,Syed and Waseef
Jemal, 2012) generated the wave of debate on the nature of and ideological significance of the
progressive HRM model. Research focusing on firm level impact of systematic and progressive
HRM practices has been getting popularity in recent years. The scholars working through the
researches and studies have suggested various conceptual constructs as explanations for the links
between progressive and synergistic HRM practices and organizational level outcomes (Z,Syed
and Waseef Jemal, 2012).

According to the authors of article the perceived level of productivity and customer service
provided by the insurance industry in Malaysia has deteriorated due to lack of skilled and
competent workforce. Organization today, specifically insurance industry is aware of the
importance of human resource management (HRM) as the leading indicator in achieving
improved sales growth and the creation of innovative insurance products. Therefore, local
insurance firms have to be more efficient, productive and innovative on its HRM practices
implementation that is closely aligned to the firm’s objective, business needs as well as the
culture to sustain competitive advantage in the market. The contribution of this paper, to the
literature is twofold. First, the conceptual model of the study tested the relationship between
HRM best practices and firm performance at the organizational level. The second contribution is
to demonstrate the impact of the strength of the HRM best practices on firm performance.\

2. CRITICAL EVALUATION

2.1. Strength & Weakness

2.1.1. Strengths

Except the pre-determining word best, the title of the article is well constructed & appealing. The
limitations & future directions are indicated clearly for further investigation as questionnaire is
limited, the indicated HRM best practices as independent variable are inadequate, the spacial
limit being only Malaysian insurance industry, and the results are described only for the study site.
The authors, then, recommended that similar studies may be taken up to cover a wider area, more
insurance business branches & more respondents with cross cultural extensions.

The interrelationship of HRM best practice & their reinforcement on each other is analyzed well
by the Pearson’s Product Moment Correlation Coefficient values revealing a relatively strong
inter-correlations within the HRM best practices. Moreover, the regression 25.4% of the variance
in firm performance is accounted by Strategic HRM alignment, recruitment & selection, training
and development, compensation and benefits, performance appraisal, internal communication,
career planning, and job design and its square. R-value of 0.504 indicating a strong relationship
between the independent variables (HRM best practice/s/) & dependent variable (firm
performance/s/). The research article is reflecting that the initiation of this study is also in
agreement with this perspective & the Malaysian insurance industry deterioration problem is due
to the non-universalistic perspective of human resource management practices. The authors
clearly conceptualized the prediction & implication of the universalistic human resource
management practices on firm performance & competitive advantages in Figure1 & Table1
 2.2. Points Requiring Clarification /"Weaknesses"/

In the title the word best may imply subjectivity. As the title was set before the study, how can
one determine the proposed factors to be called best? The title has to be objective or else
clarification is required. In the results section of the article, the description “there is strong
correlations within HRM best practices is stated. Actually, all the correlation coefficient (r)
resulted in Table 1 above are under the moderate range of 0.3≤r< 0.5, ℎ .
Hence, this point may require clarification or adjustment.

In the methodology section, the authors indicated that the questionnaire distributed is 350 but the
sample size indicated in the abstract is 312 in number. Such discrepancy may require
clarification. On the other hand, the population from which the stratified sample established is
not clearly quantified even if there is some hint of having more than 200 employees in the target
seven insurance firms. This population size is also indicated only in the introduction section, not
under the methodology part. Closely similar article published before this article by Z. Seyd and
Waseef Jemal (2012) is not referenced. This particular article might not be a plagiary because it
is narrower scope in terms of spatial, data and analysis dimensions but the reason of not
referenced may require clarification. The insurances performance had negative correlation with
job design practices. The reason behind such negative direction is unanswered. The possible
interconnectedness within the performances indicated in the front end of the conceptual
framework is not pinpointed.

In my opinion, the elements ‘human’ and ‘resource’ are obviously different. Human is the
superior and honored soul. Resource refers non-human being. It appeals to the mind that human
is the source of primary and innovative resources like knowledge, skill, labor power, goodwill &
creativity. According to Esther Ejim (2023), human resource is concerned with the job
performed by people whereas human capital is more concerned with the abilities and trainings
people possess (E. Ejim, 2023). Hence, students, scholars, professionals & employers may have
been missing or giving less attention to the right & motivational meaning of “human resource.”
Consequently, human is being perceived as a commodity or simply passive input for output.
Likewise, the independent variables of this article do not include a clear wellbeing practices for
the employees. At this verge, paradigm shift may require.
References (not included in the article)

Shaun Turney. 2022. Pearson Correlation Coefficient ® Guide & Examples.

www.scribbr.com>statistics

Z. Seyd and Waseef Jemal (2012). Universalistic Perspective of HRM and Organizational
Performance: Meta Analytical Study. ResearchGate, International Bulletin of Business
Administration, Euro-Journals, Inc. ISSN: 1451-243X Issue 13 (January 2012): 213-220

Esther Ejim. 2023. What is the difference between Human Capital and Human Resource?
http://www.pitalmind.com